364 day T. bill weighted average moves up for first time in eight weeks

The weighted average (WAvg) on the 364 day bill increased for the first time in eight weeks at yesterday’s weekly Treasury bill auction, two weeks after a policy rate cut of 50 basis points.

However the WAvg on the 182 day bill dipped by 1 basis point (bp) to 9.90% while the 91 day held steady at 8.75%, according to Wealth Trust Securities.

It said the two bp increase on the 364 day bill WAvg to 10.86% saw an amount of Rs. 11 b been accepted, while an additional Rs. 1.2 b was accepted on the 91 day bill.

Subsequent to the release of the auction results, Wealth Trust said selling pressure was witnessed in secondary bond markets with the two liquid five year maturities (i.e. 1 April 2018 and 15 August 2018) hitting intraday highs of 11.10% and 11.15% respectively while the eight year maturity was quoted within the range of 11.52% to 11.58%. Furthermore the 364 day bill was seen been quoted at levels of 10.82%-10.88% in secondary markets as well.

Overnight call money and repo rates remained steady to average 90% and 8.35% respectively as surplus liquidity in money markets on an overnight basis stood at Rs. 3.20 billion. The Open Market Operations (OMO) department refrained from conducting any form of auctions for a consecutive fourth day.

Meanwhile the USD/LKR rate closed the day steady at Rs. 126.25-Rs. 126.30 yesterday subsequent to dipping to an intraday low of Rs. 126.44 due to importer demand. The total USD/LKR volume for the previous day stood at US$ 87.05 million.